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To fight new employment law, Uber pits California drivers against one another
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Date: January 27th, 2020 12:45 PM Author: ebony deer antler To fight new employment law, Uber pits California drivers against one another Faiz Siddiqui, The Washington Post|on January 27, 2020 A screenshot shows changes to Uber's app reflecting new practices the company is adopting in an attempt to avoid regulation under AB5, a new California law restricting the use of gig workers. Photo: Uber Photo: Uber IMAGE 1 OF 5 A screenshot shows changes to Uber's app reflecting new practices the company is adopting in an attempt to avoid regulation under AB5, a new California law restricting the use of gig workers. SAN FRANCISCO - Uber's decision to allow drivers to set their own rates in three California markets is triggering fears of a race to the bottom in pricing.
The test, taking place in Sacramento, Santa Barbara and Palm Springs, is one of Uber's responses to AB5, the new California law requiring companies to make workers employees or establish clearly that they are independent contractors. That requires, among other qualifications, demonstrating the workers are free from the company's control.
Typically, Uber sets fares by market and makes real-time adjustments based on demand. Drivers have no control in pricing and little visibility into the methodology, although it's dictated by factors including the amount of time spent on the ride, as well as the distance driven.
In the test markets, Uber is letting drivers crank the established fare up to five times the price, so they only accept rides that will pay what they think the trip is worth. The idea is to address a tenet in AB5 requiring employers to demonstrate contractors' independence.
But drivers at Sacramento International Airport said early experiments with the changes proved it was difficult to earn more than Uber's base fare, and efforts to collectively raise their pay by calling for a set fare - say, two times the cost of a ride - were quashed by drivers eager to secure to a ride for less. Starting this week, drivers will also be allowed to set their price floor below Uber's established fare, meaning drivers could provide trips for far less.
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"This new option is not gonna work to our advantage," said driver Linda Simonyan, 54, of Sacramento, who has been driving part-time for Uber and Lyft for three years. "Riders are used to bottom prices and are not willing to pay more."
Tech companies such as Uber and Lyft, food delivery services DoorDash and Postmates and grocery delivery service Instacart have created a new economy of thousands of so-called gig workers, whom they consider independent contractors. The flexible employment model has allowed the companies to grow rapidly without guaranteeing the same wages and benefits to workers as normal employees.
Some workers have complained that as the companies grew bigger and raked in hundreds of millions in funding, they've been squeezed. Wages have gone down, requiring working more hours for the same pay. And work can be uneven. That prompted some California lawmakers to find that companies have saddled workers with low-paying, high-intensity jobs that don't afford the same rights and benefits as employment.
Uber says it is giving drivers flexibility merited under the tenets of AB5. "There is no question that the product changes we're making in California to strengthen drivers' independence will meaningfully affect how Uber works for drivers and riders alike," Uber spokesman Matt Wing said in a statement. He said a number of businesses have had to make decisions based on the law that have unclear consequences.
"In this case, we are starting with a very small test to make sure we minimize any negative outcomes for everyone who uses Uber, as best as we can," he added.
The test is part of the company's internal Project Luigi, Uber's effort to prove its drivers are independent so they are not subject to benefits and worker protections that would be required for employees.
As part of that plan, Uber has instituted a separate app experience for California drivers in an attempt to strengthen its case that they are running independent businesses. Changes include allowing drivers to decline trips without penalty and to be designated by passengers as "favorites," meaning the app would give them first pass at accepting trips such as rides to the airport.
And now, in the three test markets, drivers can adjust their apps to only accept trips at a preferred fare multiple - say, 2.5 times what a rider would normally pay, or anything up to five times the established price. But they'll only receive a fare if a passenger is willing to pay. Meanwhile, they'll be passed up by potentially dozens of other drivers along the way who are willing to accept rides for a lower price.
The Wall Street Journal first reported the new test.
In Sacramento, some drivers attempted to create a unified plan to win themselves double the fare at the airport, where government officials, lobbyists and outsiders frequently visit the capital on state business. Driver Simonyan put out a call on Facebook to urge drivers to action.
"Call to ALL Sacramento Uber drivers," wrote Simonyan last week. "Let's set our airport fare [multipliers] on minimum x2.0. [Passengers] will have no other choice but to take the trip. Who is with me on this?"
But even though dozens of drivers expressed interest in participating, it didn't work. Drivers who set higher fare multipliers faced longer waits or weren't assigned trips at all. Enough drivers weren't participating and were willing to undercut them.
"If you raise the fare you sit without a ride," wrote one driver on a Facebook group for Sacramento-based Uber drivers, who could not be located for comment. "Uber is giving rides to the cheapest drivers first. So unless you are last man standing you are going to be sitting a long long time."
He continued: "I turned mine on and put in 1.7x and watched in an hour as about 20 cars that came in after me [went] before me."
It's unclear if the program may be expanded, and some labor experts warned that the ramifications for drivers could be serious.
"There's really no way for workers to outsmart Uber in this particular scheme," said Veena Dubal, an associate professor at the University of California Hastings College of the Law, who focuses on the gig economy. "I think it's gonna actually lower driver income with the facade of choice and independence."
Dubal said because Uber controls pricing, drivers do not have actual control over their pay, just the fare multiplier based on the company's preestablished rates.
Moira Muntz, a spokeswoman for the Independent Drivers Guild, a New York-based machinists union group representing tens of thousands of for-hire vehicle drivers, was wary that the new system could help drivers at all.
"This sets up a system where there is a consistent set of drivers desperate for a quick payout who may make decisions based on near-term urgency that undercut their economic well-being long term and put downward pressure on pay for all drivers under the model Uber is experimenting with," she said. "Drivers are eager to see more control but when it becomes a race to the bottom in terms of pay that's no help at all."
Uber declined to say how the rollout of the experiment affected average trip fares and surge pricing, the increased rates pegged to driver supply and rider demand based on factors such as traffic and weather.
Christian Perea, 31, of Berkeley, who said he has been driving for Uber for five years, welcomed the increased flexibility provided by Uber's app changes: the ability to decline a ride and to see where trips were taking him along with estimated fares upfront. But a system that would allow drivers to lower prices beneath Uber's set rates was a bridge too far, he said.
"That will probably incentivize a race to the bottom," he said. "Imagining a world where we can undercut each other on price, down to half of 75-cents per mile, is really scary to me. In my mind, that means the end of driving for me." |
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Date: January 27th, 2020 12:49 PM Author: bipolar twinkling selfie piazza lol jfc
In Sacramento, some drivers attempted to create a unified plan to win themselves double the fare at the airport, where government officials, lobbyists and outsiders frequently visit the capital on state business. Driver Simonyan put out a call on Facebook to urge drivers to action.
"Call to ALL Sacramento Uber drivers," wrote Simonyan last week. "Let's set our airport fare [multipliers] on minimum x2.0. [Passengers] will have no other choice but to take the trip. Who is with me on this?" |
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Date: January 27th, 2020 1:55 PM Author: Snowy Balding Stage GC always wins
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Date: January 27th, 2020 2:00 PM Author: stimulating amber market Who could’ve thought a California lib policy would have a bunch of negative possibly unintended consequences? (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39496541) |
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Date: January 27th, 2020 2:02 PM Author: Snowy Balding Stage they should have just passed a law saying "Uber drivers are employees." (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39496555) |
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Date: January 27th, 2020 2:13 PM Author: chrome resort And then Uber lays off everyone ahead of the bill's effective date and Uber2 starts operating. (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39496616) |
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Date: January 27th, 2020 3:15 PM Author: Snowy Balding Stage Obviously you’d say “any company in the business of...” blah blah (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39497015) |
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Date: January 27th, 2020 6:39 PM Author: chrome resort I don't know why they didn't do that -- probably because they wanted to broadly "help" gig workers. (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39498128) |
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Date: January 27th, 2020 2:06 PM Author: dull depressive Seriously though, fuck uber drivers at this point. Years ago it was a real improvement over cabs with regular people knocking out a few hours to make an extra buck. Today, it's people who wouldn't even qualify to be cab drivers trying to make a profession out of it in cars that are shitty Nissan weekly rentals. (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39496580) |
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Date: January 27th, 2020 6:40 PM Author: chrome resort I don't take Uber or Lyft rides often, but I live in an area that is very popular for them. And I've been noticing the cars have been getting shittier. (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39498134) |
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Date: January 27th, 2020 6:47 PM Author: comical hominid it's still like $4 though so whatever ill take a nissan (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39498156) |
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Date: January 27th, 2020 6:48 PM Author: Floppy Light Masturbator In my area it's either a $9 Uber ride or a $30 cab ride. I'll take the Uber every time even if its a fucking Trabant. But in reality Ubers are still typically nicer than cabs which were always shit dirty cars. (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39498162) |
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Date: January 27th, 2020 2:08 PM Author: comical hominid lol (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39496593) |
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Date: January 27th, 2020 6:42 PM Author: Floppy Light Masturbator lol how embarrassing for libs (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39498139) |
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Date: January 27th, 2020 6:49 PM Author: Exhilarant grizzly halford feel kinda bad lol (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39498166) |
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Date: January 27th, 2020 6:50 PM Author: mentally impaired lodge i thought this meant like literally, like they had mounted machine guns on their cars now (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39498172) |
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Date: January 27th, 2020 6:53 PM Author: Yapping karate The real issue is that Cali wants to be seen as woke without hurting Big Tech or the UMC professionals that are now their base. Hence these halfbaked laws.
Uber wouldn't even exist in a fair economy, but because a bunch of liberal urban Dems use it we can't just come out and say it. |
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Date: January 27th, 2020 6:57 PM Author: house-broken nursing home friendly grandma Tbf Uber is 180 and far better than cabs
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Date: January 28th, 2020 8:48 AM Author: Yapping karate That's because they're spending money to subsidize rides for customers. Any service with artificially super low prices would be 80. How about a steakhouse that charges 10 dollars for NY Strip? An electronics store that sells 200 Macbook Pros?
The question is why do these VCs have money to throw around, and to what end. |
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Date: January 28th, 2020 8:56 AM Author: garnet aphrodisiac scourge upon the earth A transfer of money from VCs to uber passengers in the form of low fares seems morally acceptable (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500527) |
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Date: January 28th, 2020 9:29 AM Author: Yapping karate Until they drive everyone else out of business and jack up prices. (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500612) |
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Date: January 28th, 2020 9:30 AM Author: chestnut parlour generalized bond Been ten years. All's well. (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500617) |
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Date: January 27th, 2020 7:26 PM Author: Snowy Balding Stage (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39498288) |
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Date: January 28th, 2020 8:51 AM Author: Pale Party Of The First Part Kitty Cat (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500516) |
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Date: January 28th, 2020 10:30 AM Author: Boyish shrine (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500839) |
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Date: January 27th, 2020 6:55 PM Author: adulterous step-uncle's house background story idea: uber but for RICKSHAW drivers, leading to dystopia in https://en.wikipedia.org/wiki/Rickshaw_Boy also idea: updated adaptation of https://en.wikipedia.org/wiki/Rickshaw_Boy for modern uber-driving context |
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Date: January 28th, 2020 8:58 AM Author: costumed son of senegal (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500528) |
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Date: January 28th, 2020 9:01 AM Author: Sapphire cumskin LMAO, wish I would've been in the room when this idea was cooked up. Dude probably got so many high fives he needed tommy john surgery. (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500534) |
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Date: January 28th, 2020 9:29 AM Author: vivacious pearly faggotry (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500614) |
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Date: January 28th, 2020 9:41 AM Author: Curious black partner haunted graveyard (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500666) |
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Date: January 28th, 2020 9:41 AM Author: Snowy Balding Stage (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500671) |
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Date: January 28th, 2020 9:49 AM Author: chestnut parlour generalized bond (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500691) |
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Date: January 28th, 2020 10:28 AM Author: Boyish shrine (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500836) |
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Date: January 28th, 2020 11:37 AM Author: Lilac razzmatazz multi-billionaire coffee pot (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39501164) |
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Date: January 28th, 2020 10:33 AM Author: Orange crusty pocket flask ape Why does WaPo hate Uber so much? (http://www.autoadmit.com/thread.php?thread_id=4431047&forum_id=2#39500852) |